Automatic spending cuts will take effect in March if a defense budget deal cannot be reached. Defense Secretary Leon Panetta has said he may resort to furloughing the department’s civilian workers. Judy Woodruff assesses what this new threat means for the U.S. Military with Ashton Carter, Deputy Secretary of Defense.

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JUDY WOODRUFF:

It was the starkest statement yet on the possible effect of automatic federal budget cuts, due to begin in nine days, on Mar. 1st. Defense Sec. Leon Panetta notified his entire civilian work force that employees could be sent home without pay.

The warning was aimed at Defense Department workers at the Pentagon and around the world. Secretary Panetta sent them a written message, as he left for a NATO defense ministers meeting in Brussels. In it, he said there are limited options for coping with the looming across-the-board cuts. And he said: "Should sequestration occur and continue for a substantial period, DOD will be forced to place the vast majority of its civilian work force on administrative furlough."

UNDERSECRETARY OF DEFENSE FOR PERSONNEL AND READINESS JESSICA WRIGHT:

On our civilians, it will be catastrophic.

JUDY WOODRUFF:

Within hours, top Pentagon officials were out, saying employees could lose one day of work per week for 22 weeks.

JESSICA WRIGHT:

Civilians will experience a 20 percent decrease in their pay between late April and September. As a result, many families will be forced to make difficult decisions on where their financial obligations lie.

JUDY WOODRUFF:

The furloughs could start in late April and save roughly $5 billion dollars. Uniformed personnel at war would be exempt, but in a letter to Congress, Panetta wrote that the spending cuts will slow training and the procurement of weapons.

The result, he said, will be a hollow force. The nation's top military leader had said as much last week at a Senate hearing on the automatic cuts, chair of the Joint Chiefs of Staff, Gen. Martin Dempsey.

GEN. MARTIN DEMPSEY, Joint Chiefs of Staff Chairman: This would be the steepest, biggest reduction in total obligating authority for the Defense Department in history at a time when I will personally attest to the fact that it's more dangerous than it has ever been.

JUDY WOODRUFF:

In his own statement today, House Speaker John Boehner charged the president bears the blame for the stalemate — quote — "President Obama is ultimately responsible for our military readiness," Boehner wrote, "so it's fair to ask, what is he doing to stop his sequester that would hollow out our armed forces?"

White House Press Secretary Jay Carney fired back that Republicans are the ones who've refused to compromise.

JAY CARNEY, White House Press Secretary:

And it's important to understand that if they hold that position and the sequester goes into effect, it will go into effect and those Americans will lose their jobs because Republicans made a choice for that to happen.

JUDY WOODRUFF:

The president wants a combination of spending cuts and increased tax revenue to prevent the sequester. Republicans say they have already raised taxes, so the focus should be entirely on spending.

Steve Dennis is White House correspondent for the newspaper Roll Call.

STEVE DENNIS, Roll Call:

Right now, the Republican leadership is saying absolutely nothing. They will allow absolutely no new revenue. And the White House is saying they're not going to sign anything that doesn't include new revenue. It's just — you know, it's a game of chicken right now.

JUDY WOODRUFF:

And it won't be just ships, planes and troops affected. Domestic spending will absorb the other half of the $85 billion dollars in mandatory cuts. The Obama administration has warned that, among other things, 70,000 students would be removed from Head Start, air travel would be slowed as air traffic controllers are furloughed, and benefits for the long-term unemployed could be reduced.

But Roll Call's Dennis says the cuts wouldn't all happen at once.

STEVE DENNIS:

A lot of what the White House has been talking about has been basically somewhat vague. They say that some people are going to lose access to child care benefits. Thousands of parents are going to lose their child care benefits, for example, or get kicked off of Head Start. Well, that is not going to happen on Mar. 1st. It's not — or even Mar. 15th.

JUDY WOODRUFF:

Some Republicans charge the Obama administration is exaggerating the potential effects. Both the House and Senate are out of session until next week. They will return just days before the March 1st deadline.

For more on the sequestration and what it means for the U.S. military, I'm joined by Deputy Secretary of Defense Ashton Carter.

Welcome, Mr. Secretary.

DEPUTY DEFENSE SECRETARY ASHTON CARTER, United States:

Judy, how are you?

JUDY WOODRUFF:

So, let's just pick up with that comment from some Republicans that this is exaggerated.

ASHTON CARTER:

Well, for us in the Defense Department, unfortunately, it's not exaggerated.

n fact, we don't want to take any of these steps. We certainly are trying to do it in the way that does the minimum damage to national security. We don't have a lot of flexibility, and we don't have a lot of time in that regard. Sequester requires us to find $46 billion dollars in the last half of the year, and then we have an additional problem with the lack of an appropriations bill, which is a particular problem for us.

But you put those two things together, and in some of the accounts that fund training, for example, for Army units, those accounts are 30 percent short over the year, and now we only have half the year in which to make up those savings. What that means is that we're going to protect the wars in Afghanistan. We have got to fund them. We have to fund, need to fund military personnel. The president has exempted military personnel from sequester.

So the savings need to be found where we can still find savings, which will be training units that are going to be ready for other conflicts, not for Afghanistan, but that means we won't be ready for those other conflicts. That's just a mathematical fact of doing sequester. This is very damaging to national security.

Sec. Panetta and I have been saying it for 16 months. And we will do everything we can do minimize the damage, but it is what it is.

JUDY WOODRUFF:

When do these decisions have to be made? You made this announcement today, but to people look at this and say, well, we have got nine days until March the 1st.

Do these decisions have to be made now?

ASHTON CARTER:

The announcement today was about one particular item, which is very important, which is the need to furlough some of our civilian personnel in the department. We had to make that announcement today because we're required by law, a law that applies to the Defense Department, to inform Congress and employees on a certain schedule.

So, we had to tell them today that they are not immediately furloughed, but they are subject to furlough later in the year. And, remember, these people are — most people think of our employees as people who work in the Washington Beltway or something like that. They're not. Most of them work outside of Washington. They repair our ships. They maintain our aircraft. That's who these people are; 44 percent of them are veterans.

And so it's a terrible thing to have to deprive them of some of their income.

JUDY WOODRUFF:

And how do you choose who would be furloughed?

ASHTON CARTER:

It's, unfortunately, going to have to apply to most of our employees, except where there is a mission-critical exception.

And the reason why it has to apply to most of our employees is that, remember, we have to get we 46 — we have to save $46 billion dollars, and we have to do that in every way that is legally possible and that doesn't involve shorting the war or the troops that are immediately involved in combat.

JUDY WOODRUFF:

Let me raise another Republican criticism. Congressman Duncan Hunter, Armed Services Committee, is saying some of the things — the steps the Defense Department has taken recently, like delaying an aircraft carrier group going to the Persian Gulf, were done to add drama to all this.

ASHTON CARTER:

No. Believe me, nobody wants to add drama to this.

We are — want to continue to defend the country as best we can under these circumstances. So every step we take is — is one that we're forced to. In the case of the aircraft carrier, there are actually several things going on there, not just the money matter, having to do with maintenance and so forth, and we were trying to make sure that we had a carrier next year and that we could continue to have a carrier there.

And for that reason, we weren't going to have two carriers this year. So, that was a more complicated decision than just purely a money decision. But everything we do, we're really trying to keep on protecting the country and delivering the defense under these circumstances. But, as I said, in some cases, that's not going to be possible.

JUDY WOODRUFF:

Well, that's my question. Is U.S. national security at stake because of what might happen?

ASHTON CARTER:

It is, in the sense, in the following sense. By the end of the year, as I said, two-third of our Army units, active-duty Army units and all of our reserve units will not be ready to fight other wars.

Many of our Air Force air units will not be ready to fight other wars. A third of our Navy, our ships in the Pacific will not be at sea. It's not because they're not there, the ships aren't there. It's because we can't afford to operate them because we don't have any money left in the accounts that fund them. And we have to cut account by account by account. That's what sequestration forces us to do.

JUDY WOODRUFF:

If this gets resolved, Secretary Carter, between now and Mar. the 1st, or soon thereafter, do all these cuts just go away?

ASHTON CARTER:

Oh, yes. No, we would never do any of these things.

JUDY WOODRUFF:

OK. OK.

ASHTON CARTER:

And of course it's everyone's hope that a deal that covers revenues and expenditures, as everybody knows is necessary, that that deal can be made, that Congress can come around to a deal like that that the president can sign and we don't have to take any of these steps at all.

And whenever that occurs — obviously, it may not occur in the next 10 days — whenever that occurs, we will stop doing any of these things that we have been forced to do by sequester.

JUDY WOODRUFF:

Finally, let me just raise another comment one hears from Republicans who say they are friends of the Pentagon on the Hill, but they say, look, there are programs at the Pentagon that haven't worked well, aren't efficient, and you and others should have used this as an opportunity to go ahead and trim or cut those …

ASHTON CARTER:

That's a very fair point. We ought to constantly be asking ourselves, what kind of defense do we need? How much should we spend? Are we using our defense dollars wisely?

And the answer is not in all cases are we. And, you know, that is something that I think we need to constantly keep pressure on. But this is not the way to achieve that objective. And I will give you an example. We, obviously, want to keep the costs of weapons systems down, drive them down.

What happens under sequester is you have to stretch out programs, reduce the number you're buying, and that increases the unit cost. So this is — at the very time I completely agree with the people you're talking about, we need to be more efficient with the defense dollar. I'm all for that.

But this is not efficient use. This is economically inefficient and destructive use. So, it heads in just the opposite direction I think we want to do.